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ITT Gains From End-Market Strength & Investments Amid Risks

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·3 min read
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ITT Inc. ITT is poised to benefit from its diversified business structure that enables it to mitigate the adverse impacts of weakness in one end market with strength across others. In the quarters ahead, strength across the company’s industrial and energy end markets, auto market recovery, higher pump project activity and solid demand for connectors is likely to drive its performance. For 2022, ITT expects its organic sales to increase 9-11% on a year-over-year basis.

The company remains focused on improving its competency with innovation investments. Over the past few quarters, it expanded its state-of-the-art Friction R&D center and invested in its pump business and key markets, including electric vehicles. Its product innovation initiatives across friction technologies, connectors and pump businesses bode well. ITT’s investments in the Wolverine business and expansion of its manufacturing automation capabilities are also expected to aid.

It remains committed to rewarding shareholders through dividend payouts and share buybacks. In 2021, the company paid out dividends worth $75.8 million and repurchased shares worth $116.5 million. Also, in February 2022, it hiked its quarterly dividend rate by 20%. For 2022, the company intends to repurchase shares worth $100 million.

However, ITT has been dealing with the escalating cost of sales and operating expenses. In 2021, its cost of sales increased 10% on a year-over-year basis. Also, its general and administrative expenses jumped 7.9% year over year, while sales and marketing expenses rose 2.9%. For the first half of 2022, supply-chain constraints and higher raw material costs are likely to affect its margins and profitability.

High capital expenditure might also hurt the company’s short-term liquidity. For 2022, it expects to incur capital expenditure of $155 million, suggesting a year-over-year increase of 75%.

Zacks Investment Research
Zacks Investment Research


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In the past three months, the Zacks Rank #3 (Hold) company’s shares have lost 21.5% compared with the 9.9% decline recorded by the industry it belongs to.

Key Picks

Some better-ranked companies are discussed below.

Griffon Corporation GFF presently sports a Zacks Rank #1 (Strong Buy). It delivered a four-quarter earnings surprise of 56.7%, on average.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Griffon’s earnings estimates increased 9% for fiscal 2022 (ending September 2022) in the past 30 days. GFF’s shares have lost 11.9% in the past three months.

Franklin Electric Co., Inc. FELE presently has a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 17.4%, on average.

In the past 30 days, Franklin Electric’s earnings estimates have been raised 10.9% for 2022. FELE’s shares have lost 7.7% in the past three months.

Carlisle Companies Incorporated CSL presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 35.1%, on average.

Carlisle’s earnings estimates have increased 3.8% for 2022 in the past 30 days. CSL’s shares have gained 1.1% in the past three months.


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ITT Inc. (ITT) : Free Stock Analysis Report

Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report

Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report

Griffon Corporation (GFF) : Free Stock Analysis Report

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